Long Tail Asbestos Claims - Where Does Corporate Liability Lie?

Long tail employers' liability claims are those that are made or settled a long time after the insurance policy has expired. They often relate to industrial diseases of which the symptoms do not manifest themselves until many years after the trigger event, such as mesothelioma and exposure to asbestos. When such a claim is made, judges are often obliged to delve far back into corporate history in order to discern where liabilities rightfully fall. That was certainly so in one case concerning an electricity industry worker who died from cancer almost 50 years after he was exposed to asbestos.

The man worked in the turbines division of a large electricity supplier between 1965 and 1967. He was diagnosed with malignant mesothelioma in 2013 and his lawyers negotiated a settlement of his claim. After it admitted liability, the supplier paid a total of £850,652 in damages and costs before the man died.

A number of changes in corporate structure over the years had begun in 1967 with the electricity supplier becoming part of a larger group. The group's turbines business was transferred in 1970 to another electricity company. The latter had agreed to provide an indemnity in respect of past liabilities.

In reliance on that indemnity, the group sought to recoup its loss from the company. The company resisted the claim, however, arguing that the man had never been employed by the supplier and therefore liability had been wrongly conceded.

In upholding the group's claim, however, the court attached substantial weight to the man's own view that the supplier had been his employer during the relevant period. Although there were contra-indications and areas of uncertainty, the court was satisfied that he was probably right about that. The supplier had thus correctly admitted liability and the indemnity applied.